"I applaud management and labor for reaching a mutual agreement that will put WMATA and its employees on a stronger financial footing for the next four years," said WMATA Board Chairman Tom Downs. "This agreement is in the public interest and it provides predictability, not just for WMATA, but also for the jurisdictions in their budgeting."

For the first time in 30 years, WMATA employees will contribute to their pensions.

"This agreement does not include everything management wanted, nor does it included everything labor wanted. No agreement ever does," said General Manager and Chief Executive Officer Richard Sarles. "But I can confidently say that the agreement is a good balance that treats our employees fairly while curbing cost growth over the next several years."

The agreement covers the four years from FY13-FY16. There is no wage increase for Local 689 employees in FY13. In FY 14, there is a three percent wage increase, which goes to four percent in FY 15 & FY16.

Pension contributions of one percent begin in FY15 and grow to three percent in FY16. The net effect for Local 689 employees is a wage increase that averages 1.85 percent per year over the contract.

Sarles said that cost controls and efficiencies at WMATA enable the agency to cover the cost of the contract for the first two years without seeking additional funding from jurisdictions or riders.

In addition to the pension contributions from employees, the agreement delinks cost of living adjustments for retirees from employees. The pension contribution of $44 million reduces WMATA's obligation and reintroduces employee participation in line with other public pension plans.

The agreement also includes certain safety improvements and productivity changes that advance WMATA's goal of becoming a safety-first transit agency. One such example is the expansion of the types of jobs that are subject to random drug testing, including station managers and escalator mechanics. This contract also reverses the prior agreement seniority provision that resulted in the least experienced escalator mechanics being assigned to the worst condition escalators.

Under the new contract, employees will continue to receive health care coverage, including the addition of new coverage for prescription safety glasses.